Posted By Christina K. Bell
I can’t believe as I write this there are only six more days to Christmas. With three children 10 and under it is a statistic that I was well reminded of this morning as my son gobbled down the piece of advent candy he had forgotten to eat the night before.
While this time of year may be stressful for many, like myself who still have a sleigh full of presents to buy, it is a time of year many nonprofit organizations anxiously await as individuals begin to put their year-end tax strategies into action. More and more these year-end tax strategies are including contributions of automobiles to local nonprofit organizations.
When accepting a donated vehicle there a few things charities should keep in mind to ensure that this Christmas present doesn’t cause a few “Bah Humbugs” to be murmured under the Controller’s breath.
- First, know your resources. IRS Publication 4302, A Charity’s Guide to Vehicle Donations, provides guidelines for 501( c ) ( 3 ) organizations who receive donated vehicles. (www.irs.gov/pub/irs-pdf/p4302.pdf)
- Second, know the IRS has defined their regulations into two sets of categories, a donor valued vehicle between $250 and $500 and a donor valued vehicle greater than $500. The IRS requirements for each of these two categories are outlined in the IRS publication linked above.
Accepting vehicle donations can be a great way to further your organization’s charitable purpose as long as you know how to properly report the transaction to both the donor and the IRS because no one likes receiving a gift that you don’t know what to do with.